Africa PP producers target July price hikes on higher demand

LONDON (ICIS)--The majority of producers of polypropylene for the African markets are targeting price increases of $30-50/tonne (€23-38/tonne) from June levels, they said this week.

“We’re planning to increase $30-50/tonne from June,” a homopolymer raffia producer said on Wednesday.

“Demand is increasing, there’s the political situation [in the Middle East], oil prices are expected to increase, C3 [prices] is increasing, there’s a shutdown at some of plants, meaning shortage of supply.”

“[The political situation in] Syria is affecting global countries,” the source continued. “Our increasing [of prices] is not so big. Some customers take material at higher than the [June] price. They want to increase inventory before Ramadan.”

A block copolymer producer said on Monday: “In general we’ll announce a $30-50/tonne increase. First of all, the market will increase [prices], customers expect increases, [although] some expect a rollover. Naphtha prices are increasing, and inventory with customers is low.”

Another PP producer said: “Generally talking, people are expecting an increase [of prices] in July." The producer continued: “We’re expecting to increase by $30-40/tonne. I don't know exactly the justification, but people thought prices would decrease [earlier in the year] so didn't buy then. Buyers now have low stocks [so need to purchase]. Muslims are still buying [restocking prior to Ramadan].”

However, two producers plan to hold July prices steady, believing market conditions to not support a price hike. One said trading activity is limited, with buying on a hand-to-mouth basis in east, west and North Africa.